[PREMONEY 2014] Ardent Capital >> Adrian Vanzyl, "The Global VC: Southeast Asia"
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[PREMONEY 2014] Ardent Capital >> Adrian Vanzyl, "The Global VC: Southeast Asia"

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"The Global VC: Southeast Asia"

"The Global VC: Southeast Asia"

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  • Tiger: Add SEA Mobile Penetration (2010) <br /> <br /> Update 2013 data? <br /> Tried to find the updated data, but new data contradict old ones too much: Vietnam Penetration went from 133% to 70% + no SEA penetration to compared with

[PREMONEY 2014] Ardent Capital >> Adrian Vanzyl, "The Global VC: Southeast Asia" [PREMONEY 2014] Ardent Capital >> Adrian Vanzyl, "The Global VC: Southeast Asia" Presentation Transcript

  • adrian@ardentcap.com; Twitter: adrianvanzyl Overview of Tech and Venture Ecosystem in SE Asia Dr Adrian Vanzyl Ardent Capital adrian@ardentcap.com @adrianvanzyl
  • adrian@ardentcap.com; Twitter: adrianvanzyl Who is Ardent? An “Operator VC” • A successful operating company, focused on capturing a large share of the ecommerce value chain in Southeast Asia • We do so by operating (majority ownership) or investing (minority ownership) • Companies are deeply synergistic, and all cooperate with each other for mutual benefit • Existing bets in B2B (aCommerce), B2C (WhatsNew), Sourcing & E-Retail • A portfolio of seven companies, 350+ new jobs created • A track record of significant current success, including aCommerce. ROI in excess of 40% • Headquartered in Bangkok, investments across all of SEA
  • adrian@ardentcap.com; Twitter: adrianvanzyl Active Investor, bringing money into the region Ardent itself has investment from Recruit, GMO and Siemer and has co-invested with these companies
  • adrian@ardentcap.com; Twitter: adrianvanzyl aCommerce.asia – An example web 1.0 investment Phone Orders Storage Picking Packing Online Orders Order Processing Order Documentation Order Checking Quality Control
  • adrian@ardentcap.com; Twitter: adrianvanzyl About Me • Dr Adrian Vanzyl • Based in Bangkok, previously in San Francisco & Australia • Ardent Capital, Bangkok - CEO and Co-Founder – Operator VC. Investments include aCommerce.asia, WhatsNew.asia, PicoCandy • Blumberg Capital, San Francisco - multiple roles over 12 years (CTO & CEO of two portfolio companies, LP, Advisor) – Current fund $150M. Investments include Hootsuite, DoubleVerify, Nutanix • SLI-Systems, San Francisco - Co-Founder, Board Member – NZX listed. Current Q2 market cap $112M • LinkExchange, San Francisco - VP Business Development – Sold to Microsoft for $260M • LookSmart, San Francisco – CTO – IPO NASDAQ. Peak market cap of $3.5B • Sausage Software, Melbourne AU - CTO and Board Member – First internet IPO in AU. Peak market cap $1.5B MD degree MB BS Hons I Monash University, Australia
  • adrian@ardentcap.com; Twitter: adrianvanzyl • Thailand/Indonesia/Malaysia? – Maybe – Some angel money; limited experience – Almost impossible to raise > $2M • Singapore – Maybe – Lots of money, dozens of funds – Highly competitive – Many strings attached – must incorporate in SG, have key execs in SG • Japan – Maybe – Lots of money, dozens of funds – Language and cultural barriers – Highly complex due diligence • So what is the solution? – We need more venture funds in the region, outside of Singapore! How hard is it to raise venture capital in SEA? Where does a Thai/Indonesian/Malaysian entrepreneur go for money?
  • adrian@ardentcap.com; Twitter: adrianvanzyl Total Addressable Market. Why S.E. Asia? Sustainable GDP per capita growth (Avg. 5-6%) Rising disposable income Growing mobile broadband penetration Accelerating smartphone penetration Increasing Credit Card penetration Improving logistics and infrastructure Social is everything – Facebook, LINE Over $17B of branded and direct to consumer ecommerce coming into SEA in next 3 years
  • adrian@ardentcap.com; Twitter: adrianvanzyl SEA Basic Data Unit ID SG PH VN TH MY China US Population M 248 5.2 95 88 67.5 28.9 1350 315 # Online M 75 3.9 33 31 32 18 513 246 % Online % 30% 74% 34% 35% 46% 63% 38% 79% # Social Media Users # 66 3.6 38 24 27 17 NA 167.8 # E-commerce Shoppers # 5.6 1.8 5.8 13.2 14.5 10.5 164 184 E-commerce Shoppers % 7.5% 46% 18% 42% 45% 58% 32% 75% Retail Sales USD B 134 31 34 108 139 51 2,380 4,700 B2C E-commerce Market USD B 0.9 1.1 1 0.5 1.1 0.7 190 343 E-commerce % of Retail % 0.7% 3.5% 3.1% 0.5% 0.6% 1.4% 8% 9% Spend Per Spender USD 252 917 172 42 365 68 726 1,864 Source: UBS Research, Nielsen, Comscore, PWC HK, ATKearny, researchandmarkets.com, Dailysocial, smu.edu.sg, E-commerce.org.sg
  • adrian@ardentcap.com; Twitter: adrianvanzyl Southeast Asia Online Landscape 162 million Active Social Network Users Source: Global Digital Statistics 2014 SOUTHEAST ASIA ONLINE SNAPSHOT 155 million Internet Users 630 million Total Population 689 million Active Mobile Subscriptions 109% Mobile Penetration 26% Social Network Penetration 25% Internet Penetration 45:55 Urban: Rural 93% Mobile Penetration 26% Social Network Penetration 35% Internet Penetration 52:48 Urban: Rural GLOBAL ONLINE SNAPSHOT
  • adrian@ardentcap.com; Twitter: adrianvanzyl Internet Penetration is Exploding 24M 31M 18M 4M 55M 34M 194M New internet users 360M Internet users Source: We are Social, Accenture 2010 2020 62% Est. internet penetration 25% 2010 internet penetration
  • adrian@ardentcap.com; Twitter: adrianvanzyl Epicenter Outside US Structural shift towards internet trend in Asia Pacific (>40%) US is no longer the epicenter of internet usage 66% 13% 34% 87% 0% 20% 40% 60% 80% 100% 1996 2012 Internet Usage US Outside US Source: UBS, comScore Media Metrix
  • adrian@ardentcap.com; Twitter: adrianvanzyl 19% 17% 16% 17% 38% 37% 0% 10% 20% 30% 40% NORTH AMERICA SOUTH AMERICA EUROPE OCEANIA AFRICA ASIA Mobile Usage, In Terms of Page Views, as % of Web Usage (2014) Asia is amongst the top mobile device users in the world Source: Mary Meeker, Code Conference. StatCounter, 5/14. Global Average Mobile Device Users
  • adrian@ardentcap.com; Twitter: adrianvanzyl SEA Mobile Penetration All major SEA countries are above the global average in mobile penetration Source: Bain&Company Higher Mobile Penetration Singapore 144% Vietnam 133% Malaysia 122% Thailand 110% SEA Average Philippines 92% Indonesia 90% Global Average China 63% Country | Penetration
  • adrian@ardentcap.com; Twitter: adrianvanzyl Smartphone Penetration in SEA (2013) Source: TigerMine Research Credit card usage by country Indonesia Malaysia Philippines Singapore Thailand 15% 23% 49% 80% 87% 0% 20% 40% 60% 80% 100% Smartphone Feature Phone
  • adrian@ardentcap.com; Twitter: adrianvanzyl Comparative Study: Thailand vs China Thailand requires 1.5 vs 3 years to reach the same online penetration level as China’s post 3G 0 0.1 0.2 0.3 0.4 0.5 0.6 2003 2005 2007 2009 2011 2013 2015 2017 Internet Penetration Internet penetration in China Internet penetration in Thailand 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 2008 2009 2010 2011 2012 2013 2014 Smartphone penetration Smartphone penetration in China Smartphone penetration in Thailand Source: CNNIC, UBS estimates
  • adrian@ardentcap.com; Twitter: adrianvanzyl Mobile Advertising Opportunities $0 $20 $40 $60 $80 $100 North America Western Europe Asia-Pacific Worldwide Mobile Ad Spending per Mobile Internet User 2012 2016 High discrepancy between Mobile Ad Spending per User and Actual mobile usage in Asia-Pacific, specifically in SEA Source: eMarketer, WeAreSocial 101% 129% 109% 93% Mobile North America Western Europe Southeast Asia Worldwide Penetration
  • adrian@ardentcap.com; Twitter: adrianvanzyl Online Advertising SEA online shoppers are very responsive upon seeing online ads Source: Google Southeast Asia Online Shopper Study 68% 79% 70% 73% 85% 79% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% THAILAND INDONESIA PHILIPPINES Used info from ads when researching product Took direct action from ads
  • adrian@ardentcap.com; Twitter: adrianvanzyl 0 2 4 6 8 10 12 14 16 18 20 22 24 26 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 US$Billions Year Furniture & Floor Coverings Sports & Leisure Equipment Home & Garden Products Books, News & Stationery Apparel, Accesories & Luxury Goods Music, Video & Entertainment Software Food & Grocery Electrical & Electronics 7.1 23.5 13.5 3.5 2.5 Thailand, Philippines, & Indonesia Online Retail is Growing Fast! Online Retail Sales Forecast 2005 – 2015 – Source ICD Research Ecommerce is Exploding 18.7
  • adrian@ardentcap.com; Twitter: adrianvanzyl Online Shopping Categories Apparel has highest purchase frequency but lowest average spend when compared with Mobile Phones and Consumer Electronics 46% 51% 35% 21% 14% 16%17% 19% 14% 0% 10% 20% 30% 40% 50% 60% Thailand Indonesia Philippines % bought last month Apparel Consumer Electronics Mobile Phones 0 100 200 300 400 500 600 Thailand Indonesia Philippines Average Purchase Price (USD) Apparel Consumer Electronics Mobile Phones Source: Google Southeast Asia Online Shopper Study
  • adrian@ardentcap.com; Twitter: adrianvanzyl ASEAN Economic Community (AEC) The ASEAN Economic Community (AEC) represents a tremendous opportunity to do business in Southeast Asia. Free flow of goods Free flow of services Free flow of investment Free flow of capital What it means… Free flow of skilled labor What it comprised of… More attractive to foreign direct investment Easier to obtain/move capital across the region. Easier to recruit talent from countries in Southeast Asia Cheaper and easier to sell goods across borders Easier to provide services and establish companies in the region In 2015, Southeast Asia will transform into an integrated market, making it easier for businesses in Southeast Asia to expand Source: ASEAN
  • adrian@ardentcap.com; Twitter: adrianvanzyl Leading Ecommerce Players in SE Asia By Country B2C Marketplaces B2C Multi-brand Retailers B2C Private Sales & Daily deals C2C Marketplaces & Classifieds Singapore Thailand Indonesia Philippines
  • adrian@ardentcap.com; Twitter: adrianvanzyl Biggest player in SEA - Who is Rocket Internet? Rocket Internet has built over 100 companies in 50+ Countries Started in 2007; headquartered in Berlin 75+ active independent portfolio companies Employing over 27,000 people Raised over $1B in 2012 30+ exits $2.5B+ in revenue 7 companies currently in SE Asia Indonesia Malaysia Philippines Singapore Thailand Vietnam Indonesia Malaysia Philippines Thailand Vietnam Indonesia Indonesia Malaysia Singapore Vietnam Indonesia Malaysia Singapore Thailand Vietnam Indonesia Malaysia Philippines Singapore Malaysia Philippines
  • adrian@ardentcap.com; Twitter: adrianvanzyl Started in Dec 2011 Adaptation of Zappos.com 1,300+ employed across the region Annualized Gross Run Rate: €115mm Well over $126M in funding Spent over $23M in marketing in 2012 Rocket’s SEA bets Started in Feb 2012 Adaptation of amazon.com and alibaba.com 900+ employed across the region Annualized Gross Run Rate: €92M Well over $185M in funding INVESTORS:
  • adrian@ardentcap.com; Twitter: adrianvanzyl VC Firms: SEA Outside of SG PHILIPPINES Launch Garage: Seed ($30K) Ideaspace: Seed ($25K-$100K) Kickstart Ventures: Seed ($100K) Nest: Seed ($50K) Hatchd Digital: Seed ($100K) Narra Ventures: Seed/Growth ($500K - $1M) IPVI: Later Stage ($1M) ICCP: Later Stage PE firm ($1M and up) INDONESIA IDEOSOURCE: Seed ($500K) Mountain Ventures: Seed ( $250K) Rebright: Seed ($200K) East Ventures: Seed ($50K) Grupara: Seed (Up to $50K) VIETNAM Silicon Valley Project: Seed ($10K-$20K) PVNI: Seed (Up to $250K) DFJ Vina Capital: A ($1M-$2M) IDG Ventures: Seed, A, B (Up to $2M) CyberAgent: Seed, A (Up to $1M) THAILAND True Incube: Seed ($15K) DTAC Accelerate: Seed ($15K-$50K) Ardent Capital: Seed ($100K-$200K) AIS Invent: Seed/ Series A (Up to $2M) MALAYSIA 500 Durians: Seed ($50K-$100K) 1337 Accelerator: Seed ($15K) The Star Accelerator: Seed (Up to $300K) Asia Venture Group: Seed (Up to $500K) Catcha Group: A, B, C, D (All Range)
  • adrian@ardentcap.com; Twitter: adrianvanzyl • Singapore’s two sovereign wealth funds (“SWF”s) have more money under management than the entire US venture capital industry ($315B vs 200B). • SG’s National Research Foundation (“NRF”) provides dedicated Early Stage Venture Fund (ESVF) to support early stage ecosystems (Series A) • First Round (2008) – Seeded S$50M total funds to five VC firms. VC companies must co-invest on a dollar-to-dollar basis. (Totaling S$100M fund size) • There is a buy-out option offered to other LPs/GP • These companies have collectively invested over S$38M in 24 start-ups from various technology sectors to-date. • Second Round (2013) – S$50M to five VC companies on the same dollar-to-dollar co-invest basis • NRF will take profit up to 5% ROR (simple interest) and share rest with LPs/GP Singapore, INC
  • adrian@ardentcap.com; Twitter: adrianvanzyl • Generous support from the Singaporean government leads to large number of Singapore-based funds, but start-ups need to be based in Singapore to qualify for funding and often need to have key executives in Singapore • Early Stage ($250K-$500K) • Growth Stage ($1M up) VC Firms: Singapore
  • adrian@ardentcap.com; Twitter: adrianvanzyl VC Firms: Singapore • There are also bigger funds that are heavily tied to Singapore • There are also many Japanese investors – both funds and corporates investing in SE Asia, some with offices in Singapore Corporate venture capital fund of SingTel; investments must be strategically beneficial Venture arm of Temasek, an investment company owned by the Government of Singapore
  • adrian@ardentcap.com; Twitter: adrianvanzyl Acquisitions and Exits 1 1 2 4 5 4 7 1 5 3 1 2 3 1 1 1 2 2 2 1 3 1 0 5 10 15 20 2005 2006 2007 2008 2009 2010 2011 2012 2013 NumberofExits Vietnam Thailand Philippines Malaysia Indonesia Singapore 2% 8% 13% 13% 19% 45% Exits since 2005 Vietnam Thailand Philippines Malaysia Indonesia Singapore Singapore and Indonesia make up 64% of the total tech exits since 2005 Source: SGE Since 2005, there have been 53 tech acquisitions in Southeast Asia
  • adrian@ardentcap.com; Twitter: adrianvanzyl Running a fund in SEA - Challenges • Number 1 issue – Talent – For your fund – key ‘on the ground’ staff – Company execs in portfolio • Dealflow – how to see best deals • Legal – fund structure, investee structure • Tax – where are you liable? USA issues • Exits – who will buy? How do you get your money out? • Lack of transparency – legal/tax/operations • Lack of accurate data – no one knows the exact numbers for anything!
  • adrian@ardentcap.com; Twitter: adrianvanzyl Do & Don’t • Don’t just open a satellite office and fly in fly out. • Cultural nuances – Six completely different cultures, not just one place • Local ownership restrictions – BOI in Thailand, Nominee in Indonesia, Licenses in Vietnam • Location of Holding Company – Either in Singapore or Hong Kong – Importance for legal, fund raising, exits • Local partners – Tap into local expertise, dealflow, sanity checks • DO – come into the region, invest, educate, support
  • adrian@ardentcap.com; Twitter: adrianvanzyl THANK YOU Thailand Office 946 Dusit Thani Building, 4th fl., Rama IV Rd. Bangrak, Bangkok, Thailand 10500 Indonesia Office AXA Tower 45th Floor, Jl. Prof. Dr. Satrio Kuningan Kav. 18, Kuningan City, Jakarta 12940 Thailand Distribution Center 951/1 Soi Preeyanon, Sathupradit Road, Bangpongpang, Yannawa Bangkok 10120, Thailand Adrian Vanzyl CEO Ardent adrian@ardentcap.com @adrianvanzyl Singapore Office Oxley Bizhub, 61 Ubi Road 1, #2-13 Oxley Bizhub, Singapore 408727